Ian Copsey is a veteran analyst having begun his career in Forex 28 years ago. He is author of "Integrated Technical Analysis" and his new groundbreaking book "Harmonic Elliott Wave." He provides his popular daily forecast “The Harmonic Daily Forecaster” through his website www.harmonic-ewave.com.

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HARMONIC ELLIOTT WAVE

Tuesday, September 7, 2010

We should see the Dollar resume its rally against EURUSD… at least…

The market has become terribly disjointed recently with the normal correlation between the 4 majors having dropped considerably. EURUSD & USDCHF have almost been rising & falling in tandem rather than the other way round while the last couple of days has seen EURUSD & GBPUSD suddenly moving of their own accord. This discordance does take away the general comfort of being able to coordinate respective tops and bottoms that adds a dose of uncertainty.

That EURUSD peaked in the 1.2907-21 area does appear to suggest that the correction is done with. This morning’s drop appears to be reflective of this. However, I’m finding it mighty tough to make sense of a similar direct loss in GBPUSD which I feel still needs a little sideways consolidation before it can resurrect the normal EUR/GBP correlation. So from that point of view I think we need take care early in this move. I do feel the losses in both of these pairs will be substantial over the coming week but the early stages still appear to require some degree of choppiness.

For USDCHF… well, I do feel this still has further to decline but probably not quite as deep as I had suggested last week and a larger reversal higher should be expected before too long. The daily bullish divergence is really quite solid now.

USDJPY… still betwixt and between… I can see an argument for direct gains but probably much depends on EURJPY. The cross has also suffered under the weight of this morning’s drop in EURUSD but has met with a key support area. Ideally I’d like to see one more high above 109.55 before it turns lower and remain with the opinion that EURUSD will be the driving force. This tends to argue a more bullish USDJPY but whether this generates a direct move above the 85.90 swing high is yet to be seen… There may still be potential for continued sideways consolidation while the expected (eventual) drop in the cross develops… Thus, this three-way balance still remains rather sensitive.

AUDUSD still looks supported but has a little duality about the near-term. We need to be aware of the critical support here. USDCAD does appear on its way lower but the question is how deep any correction will manage to push higher. It is still within the 5 month sideways consolidation and has further to go before it finally breaks out…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+15 pips)

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DISCLAIMER: Daily Forecaster is an analytical tool only and is not intended to replace individual research. The service is offered as an opinion on the current state of the market with anticipated trading signals but not recommendations. The information provided in Daily Forecaster should not be relied on as a substitute for extensive independent research before making your trading/investment decisions. Ian Copsey is merely providing this service for your general information. No representation is being made that any view or opinion will guarantee profits or not result in losses from trading. In addition any projections or views of the market provided may not prove to be accurate. The opinions are subject to change without notice. Opinions or views expressed in Daily Forecaster are not meant to be either investment advice or a solicitation or recommendation to establish market positions. Ian Copsey will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this service. It must be understood that Forex trading involves substantial risk of losses as well as profits. The information contained is private and may not be distributed or shared.

About Ian

I have been around in financial market for over 30 years, the last 23 years as a technical analyst. I focus heavily on price development and structure as it is the only way to generate accurate support and resistance. I use my own adapted form of Elliott Wave along with derivatives of Fibonacci and harmonic ratios to derive support and resistance. I provide a range of reports covering daily & weekly Forex, U.S. Indices.